In organisms as diverse as humans, flies, nematodes, fission yeast and plants, small interfering RNAs (siRNAs) regulate essential processes that include viral defense, silencing of retrotransposons, inactivation of specific mRNAs and centromere maintenance. The mechanisms by which siRNAs target homologous RNAs for degradation in Dicer and RISC-mediated RNA interference (RNAi) pathways are fairly well understood. By contrast, the mechanisms by which siRNAs direct histone modifications and/or cytosine methylation events that silence and maintain heterochromatic loci are poorly understood. A newly discovered activity required in the heterochromatic siRNA pathway in Arabidopsis thaliana is Nuclear RNA polymerase IV (pol IV). The two largest subunits of pol IV are similar to the catalytic subunits of E. coli DNA-dependent RNA polymerase and to the corresponding subunits of eukaryotic nuclear RNA polymerases I, II, and III. Disruption of pol IV subunits causes heterochromatin to disperse coincident with losses in cytosine methylation and siRNA production at repetitive genes and retrotransposons. The simplest hypothesis is that pol IV generates precursor transcripts for Dicer-generated siRNAs that direct heterochromatin modifications to homologous sequences. Interestingly, pol IV appears to lack conventional RNA polymerase activity using double-stranded DNA as the template. Pol IV largest subunits also have non- canonical amino acids at the presumptive active site, suggesting the hypothesis that pol IV has a novel polymerase activity. The finding that pol IV-dependent siRNA production also requires RNA-dependent RNA polymerase 2 (RDR2) and cytosine methyltransferase activity (DRM or MET1) suggests that double- stranded RNA or methylated DNA could be specialized templates transcribed by pol IV. The aims of the proposed research are: 1) To determine the templates, products and subunits of pol IV;2) To deduce the step at which pol IV acts in the heterochromatic siRNA pathway and 3) To test the hypothesis that two distinct forms of pol IV act non-redundantly in contributing to global heterochromatin organization. Chromatin modifications are increasingly linked to siRNA involvement and are implicated in numerous cancers as well as Rett, ICF, Prader-Willi, Beckwith-Wiedemann and Fragile X syndromes. Chromosome instability, also linked to siRNA involvement at centromeres, can lead to trisomies or embryo lethality. Moreover RNA interference shows promise as a gene-therapy tool with which to combat disease. Our studies, which make use of Arabidopsis unique genetic resources, may therefore shed light on mechanisms of siRNA production and chromatin modification that have relevance to human health.